KARACHI, Feb 11: The increase in prices of sugar and LPG has mounted pressure on household budget. The good news is that sugar retail price has declined to Rs38 from Rs40-42 just before Ashura. The wholesale price of sugar has declined to Rs36.50 from Rs38 per kg. However, consumers will have to bear additional transport cost as the price of LPG touched Rs60 from Rs45 per kg a few days back.

“Sugar price has declined because of a slight fall in demand after Muharram,” Karachi Retail Grocers Group general-secretary Farid Qureishi said.

Despite a massive uproar in the ongoing Senate sessions where many facts were disclosed, the recent price decline has nothing to do with the government’s efforts and the price has fallen on market sentiment owing to a fall in demand after 10th Muharram, a market observer says.

If 70 per cent of sugar mills are owned by the government ministers, as claimed by opposition benches, then one can guess the reason as to why different tiers of the government have not been able to check rising prices of sugar.

Even during last Ramazan, the city governments’ price control campaign remained confined to retailers of other commodities instead of sugar and according to market sources, political connections played a role.

Several times the city governments send notices to the wholesalers and sugar millers to disclose their stocks but only three to four wholesalers revealed their stocks position, while the millers refused to comply.

Adviser to the Karachi Wholesale Grocers Association, Anis Majeed said that the Trading Corporation of Pakistan should release the sugar stocks in two lots of 50,000 tons each after keeping 100,000 tons for utility stores. But before floating tender for sugar sales, the corporation must book some imported consignment so that it could further exert some pressure on the millers.

The future price depended on the arrival of Indian sugar, he said, adding that Indian sugar would cost Rs34.50 per kg after excluding various duties and transportation charges. In case 15 per cent sales tax was abolished on the import, then there would be a further decline in prices, he added.

In case of LPG, people are seen making a cue at retailers’ shops for gas, while taxi and rickshaw drivers are charging exorbitant fares. The government and Ogra have yet to come out with any concrete decision in this regard.

LPG Distributors and Welfare Association chairman Hadi Khan said the demand for LPG had outstripped supplies and the government was yet to realize it. “We require 2,000 tons a day but only 1,400 tons per day are arriving from the producers and other fields,” he said. Despite the fact that the LPG production has been raised to 1,400-1,500 tons a day from 1,000 tons in the last one year but demand has been continuously rising.

Both LPG Distributors’ Association and LPG Association marketing companies) have been claiming that they have not increased prices. However, the government and Ogra have yet to ascertain the situation in this regard and take measures in identifying the actual reason of rising prices.

Mr Hadi said that allowing LPG import without duty and taxes was the only solution to stabilize prices and meet the rising demand for gas, as producers had failed to maximize their production. He said some companies had imported up to 3,500 tons in January but it could not match with the rising demand. Besides, waiving duty and tax on LPG import will offset the impact of rising LPG prices in the world markets.

In case Ogra comes out with rules and regulations for use of LPG in the auto sector, the demand will surge to 4,000 tons a day, he says, adding that then the market situation would become worse.